Sports prediction company Sporttrade seeks approval from Commodity Futures Trading Commission (CFTC) to prevent potential "unrectifiable damage."
Sporttrade's Plea to CFTC: Breaking Barriers in Sports Prediction Markets
Sporttrade, a leading sports prediction platform, is challenging the status quo in the US. With licenses in five states, they're stepping up their game, eyeing a nationwide presence, and they're asking the Commodity Futures Trading Commission (CFTC) for the green light. The reason? To keep pace with rivals like Kalshi, Crypto.com, and Robinhood, who operate freely across all 50 states, circumventing state-specific gambling laws.
In a letter penned to the commission, Sporttrade CEO, Alex Kane, hopes to bridge the understanding gap. He's seeking the commission's agreement to accept "trades on event contracts" without formal federal registration. Kane's letter comes shortly after Sportico's report.
The competitive landscape has taken a tense turn, with Kalshi butting heads with state regulators. Some state regulators have issued cease-and-desist orders, and Kalshi has responded by pursuing legal action against those who issue such orders. Kalshi contends its sports contract products aren't a form of betting and, as such, ought to be under the CFTC's purview rather than gambling regulators.
In contrast, Kane vehemently disagrees, calling Kalshi's claim that these products aren't a form of sports betting "ridiculous." Kane champions the superiority of prediction markets, asserting that they offer higher returns and impose fewer restrictions when customers are winning.
The future of Sports prediction markets hangs in the balance as Sporttrade's request is under review by the CFTC. If approved, Sporttrade could join Kalshi in offering nationwide services, leveling the playing field and shaking up the sports prediction landscape. Keep your eyes peeled for updates on this exciting development!
Enrichment Insights: Current Status of Sporttrade's Request to CFTC
Sporttrade's request to operate nationwide sports prediction markets is currently under review by the Commodity Futures Trading Commission (CFTC). The request is driven by the need to compete on an equal footing with federally regulated competitors like Kalshi, Crypto.com, and Robinhood, who currently operate across all 50 states without adhering to state-specific gaming laws[1][2][3].
Originally, Sporttrade secured licenses to operate in five states only (New Jersey, Colorado, Arizona, Iowa, and Virginia). The company cites the competitive disadvantage of being limited to these states as justification for seeking CFTC approval to offer its predictions nationwide[2][3].
Kalshi, a competitor, has faced backlash from state regulators, with some issuing cease-and-desist orders[2][3]. However, Kalshi claims its sports contract products aren't traditional betting, placing them under federal jurisdiction instead[2][3].
The outcome of Sporttrade's request could potentially shake up the sports prediction market landscape, enabling Sporttrade to offer its services nationwide like its competitors[1][2][3].
- Sporttrade, in a bid to compete with rivals like Kalshi, Crypto.com, and Robinhood, is seeking permission from the Commodity Futures Trading Commission (CFTC) to offer futures in sports prediction markets nationwide.
- The CFTC is currently reviewing Sporttrade's request, which stems from the need to comply with federal regulations and avoid the state-specific gambling laws that rival companies currently bypass.
- In contrast to Kalshi's claim that their sports contract products aren't a form of sports betting, Sporttrade CEO, Alex Kane, finds this assertion ridiculous and advocates for the superiority of prediction markets.
- If approved, Sporttrade could join Kalshi in offering nationwide services, potentially leveling the playing field and causing a significant shift in the sports prediction market business.
